There is no one “right” way to budget as a couple. The key to success is finding a shared approach that works for both you and your partner. Consider these ways to create a couple’s budget and reach your money goals together.
The importance of budgeting as a couple
You and your partner are teammates in life, working in tandem to accomplish your long-term financial goals, for instance, a wedding or home. Aligning your habits and behaviors can help strengthen your money skills as a couple.
4 steps to start a couple’s budget
Kicking off a shared financial strategy can be daunting. Try these steps to get started:
1. Set financial goals
Depending on where you and your partner are in your life journey, your priorities may be different. Talk over a few different financial goals as a starting point. To get started, consider some common objectives like:
Paying off debt, like student loans or credit card debt
Building an emergency fund
Starting a high-yield savings account
Focusing on retirement savings
Saving up for a house
2. Determine your combined income
Knowing how much money your household earns is an important foundation for your financial plans. Write down each of your current incomes, whether that’s from full-time employment, investments or a side hustle. Then total up each person’s contribution for a combined income.
3. Identify joint expenses
Review utilities, groceries, rent or mortgage payments, subscriptions and other shared costs. Approximating your shared spending on things like dining out and entertainment can help you get a fuller picture of your joint expenses — take it a step further by meticulously tracking your spending for a few months to get a more accurate number.
4. Assess your savings goals
Once you have a sense for how much money is coming in and going out, look at what’s left and align it with your goals. For example, if you want to buy a house in five years, look at how your current savings behavior may need to change to meet your agreed-upon timeline.
Couples budgeting strategies
Now that you’ve handled the basics, consider the following strategies:
What’s mine is ours
Some couples combine all their earnings and expenses, approaching their budget as one entity. For this method, total up your incomes and lay out your expenses — no need to split, assign or track whose funds covered what.
This method works well for partners who share similar outlooks on how to track, save and spend. However, if you and your partner have different attitudes toward saving and spending, you may want to consider a different approach.
Yours and theirs
You and your partner can separate joint expenses into two groups: “yours” and “theirs.” Then personal expenses like debt payments, shopping, car payments and outings get covered individually. Separate budgets can give autonomy to each partner and eliminate the need to agree on a single approach.
Proportionate budgeting
With this approach, expenses are paid proportionately from each person’s income. For instance, if you make 60% of the household income, you’d pay 60% toward your shared expenses (and your partner would pay 40%). You might choose to pool the remaining funds into a joint savings account.
Set contribution
Here, each partner chips in a predetermined amount and keeps any remainder of their paycheck separate. Some couples may agree that equal contributions are most fair, which can be a simple solution for couples with similar incomes.
Keep in mind, this method can be difficult to implement if your expenses have significant fluctuations from month to month.
Try the envelope method
This approach, also called cash stuffing, is a traditional budgeting approach in which you divide up your money toward specific expenses. This hands-on method gives every dollar a purpose, which can be especially helpful if money is tight.
Want to take a similar approach while keeping things digital? Ally Bank Savings Accounts and Spending Accounts both include buckets, a free tool to help you organize your money and reach your goals faster.
Budget for happily ever after
Facing challenges together is a key part of being a couple — and financial hurdles are no different. Budgeting for a household may seem daunting, but with a little research, planning and compromise you can find an approach that’s as perfect for you as you are for each other.
